Cuba: What Looms Ahead?
May 4, 2018
On April 19, 2018, it became official: the 86-year-old Raul Castro stepped down as president, and his selected successor, First Vice President Miguel Mario Diaz-Canel, assumed the top leadership post for Cuba. It was indeed a historic moment for the Caribbean country as a member of the Castro family was not at the helm for the first time since 1959. Although the president has changed, little else is changing—at least for now. Meanwhile Cuba’s economic problems deepen.
Diaz-Canel was the only candidate nominated for the presidency, and he received 603 out of 604 votes from the National Assembly, the instrument of the Cuban Communist Party. In his speech, the outgoing Raul Castro indicated that the pace of change would remain glacial as the new leader, a staunch fidelista, would be eligible to serve for two consecutive five-year terms. Moreover, Castro is staying on as first secretary of the Communist Party and head of the Cuban military. Only in 2021 will he step down as head of the Party in favor of Diaz-Canel. Castro also noted that in July the National Assembly will hold a session to select a new Council of Ministers and will appoint a commission to write a new constitution, which will in turn be ratified by the same body and the Cuban public.
For his part, Diaz-Canel played the role of faithful loyalist to the Castroite government. In his speech, he indicated that he was committed to the process of updating Cuba’s economic model without making major changes to the Cuban Revolution. Along those lines, he stated, “The mandate given to this legislature is to give the continuity to the Cuban Revolution at a crucial historical moment, which will be marked by all that we can advance in updating the economic and social mode… In this legislature there will be no space for those who aspire to a restoration of capitalism; this legislature will defend the Revolution and will continue the improvement of socialism.”
Despite the change at the helm, Cuba still faces many of the same economic problems of the end-Castro era: finish dealing with the country’s defaulted debt in a bid to regain access to international capital markets; improve agriculture production to feed the island’s population and reduce its dependence on imported food; make Cuba’s state-owned enterprises run more efficiently; reduce endemic official corruption; and revamp the Caribbean nation’s dual currency system. With Castro family members holding key positions in the military and economy, any reforms will have to contend with entrenched interests that are not open to having an economy run on cost-efficient, private-sector measures. China, which has emerged as the major trade partner and key investor in Cuba, has more clearly indicated that it would prefer to see a faster pace of market-oriented reforms. China’s model is based on having a single party in control (following Leninist principles of the vanguard of the revolution), but having an economy run to some degree on market dynamics. Vietnam has followed this market-Leninist model successfully as well, but Cuba’s Communist Party fears any loosening of economic controls will lead to demands for political liberalization.
The problem, however, remains that the economy has been stagnant for a number of years, and prospects for 2018 are not encouraging. The outlook on the export front is not positive due to problems in the sugar sector, one of the country’s leading exports. According to a Reuters estimate, Cuba is expected to produce between 1.1 and 1.3 million tons of sugar this harvest. If so, this would be the lowest raw sugar output in over a century and a substantial decline over 2017’s production. The scope of the decline of Cuba’s sugar industry is evident in that the island produced close to 8 million tons of raw sugar in 1991.
Related to the economy is the seemingly endless downward spiral of Venezuela, formerly a major source of assistance for Cuba. According to the International Monetary Fund, the Venezuelan economy contracted by 14.0 percent in 2016 and by another 15.0 percent in 2018. It is forecasting yet another contraction of 6.0 percent in 2019, while inflation is expected to hit 13,864 percent in 2018. It is not likely that Venezuela will be able to help the Cuban Revolution any longer as the Venezuelan revolutionary experience has parked that country in a developmental cul-de-sac. And China has little inclination to step in and help Cuba to the same extent that the Soviet Union did until 1991 or Venezuela in recent years.
And there is not likely to be any relief from relations with the United States. The Trump administration has responded to Cuba in a chillier fashion, stepping back from the Obama administration’s rapprochement. A number of restrictions have been imposed, and the U.S. embassy in Havana remains understaffed (due to security concerns related to sonic disturbances). Moreover, the appointment of foreign policy conservatives, such as Secretary of State Mike Pompeo and National Security Adviser John Bolton, probably portends a further hardening of measures against Cuba.
Cuba faces more challenging times ahead, and the new president is not going to find the road an easy one. As the Cuba Study Group observed, “No one should envy Miguel Diaz-Canel’s task. He will assume office at a time of considerable economic insecurity, and some of the most pressing issues that Raul Castro might have confronted with greater historical authority—currency reform, especially—will fall on his plate. If Raul Castro himself struggled to marshal a stable political coalition within the government and the Party to press an agenda of reform, Diaz-Canel may face greater difficulties still.”
It would appear that there is no counterrevolution around the corner. Cuba remains under the control of an authoritarian government, backed by the armed forces, Communist Party, and state bureaucracy. However, as the old revolutionaries either die off or retire, the island’s younger generations, with little memory of the heady years of the Revolution, will come into their own. Cuba remains an island, but the limited connections with the outside world are likely to grow and erode some of the government’s legitimacy, especially if Canel-Diaz is unable to make good on bread-and-butter issues.
Although it is easy to be pessimistic about Cuba’s political future from the perspective of hoping for a shift to a more open and elective political system, it should be remembered that other authoritarian/autocratic governments have suddenly been ousted after decades of being in power. Indeed, the Jasmine Revolution that started in Tunisia in 2011 and swept through the much of North Africa and the Middle East began after a 26-year-old street vendor set himself on fire because local officials repeatedly demanded bribes and confiscated his merchandise. Tunisians soon toppled the government by massive demonstrations, protesting against high unemployment, poverty, and political repression. Cuba is not Tunisia, but it has many of the same problems that set the North African country down a very different political trajectory.
Cuba remains important to the Caribbean, well beyond its size. It is one of the few countries that defied the United States and maintained a strong sense of nationalism, albeit financed by external actors. The island is finally seeing a non-Castro at the helm, but the supporting cast is not changing markedly, and the economy remains problematic. It is questionable whether Diaz-Canel can do what Castro spoke of, “perfecting socialism,” which would mean far greater reliance on market mechanisms to jump-start a somnambulistic economy afflicted with an entrenched political elite that is much like the nomeklatura who ran the Soviet Union’s economy into a wall in the late 1980s after decades of mismanagement and corruption. Tough choices loom for Cuba’s new leader, and it is dubious that he will be able to do what needs to be done, running the risk that the Caribbean country’s future will be one of economic stagnation and long-term public disenchantment with a failed socialist experiment.
Scott B. MacDonald is a senior associate with the Americas Program at the Center for Strategic and International Studies in Washington, D.C. The author wishes to thank Gustavo Arnavat, Eric Gettig, Georges Fauriol, and David Lewis for their comments.
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